Deal on airport facility could be reached by end of August

The long struggle to make manufacturing pay at Cape Girardeau Regional Airport could be over by the end of August.

Either Commander Premier Aircraft Corporation will be sold to a new owner with financial strength or the company will lose its city-financed airport facility, Mayor Jay Knudtson said Friday. And after spending three hours Friday on the telephone with a prospective buyer, he said he's optimistic it will be a sale rather than eviction.

"I can tell you that so far the discussions are going extremely favorably," Knudtson said. "While I am gun shy and certainly wounded through the previous two relationships, I am cautiously optimistic that we are moving forward in a direction that could lead us to one of the best outcomes we could have ever hoped for."

If Commander Premier is purchased, the tally would grow to four airplane manufacturing companies to become involved with the city over the past 10 years. Commander Premier became the third such company when the buyers of a defunct manufacturing company arrived in October 2005 with plans to start building single-engine airplanes for private owners.

Commander promised up to 100 jobs. To make it easier for the company to survive, the city gave them a 52,000-square foot building rent-free for six months. After that, the company was scheduled to pay an escalating rent that, by Jan. 1, 2010, was supposed to equal the city's debt obligations for a 2001 bond issue that built the facility.

But Commander has never built an airplane -- the facility houses a parts warehouse and repair facility for aircraft built by the original Commander company -- and has not made a rent payment since December 2007. Back rent totals $491,500.

Asked if the city expects back rent to be paid as part of any deal for Commander, Knudtson said that outcome would be too optimistic. But the deal under consideration, he said, would include a purchase, not a lease, of the manufacturing building, thus relieving the city of $2.2 million in debt that remains from the $2.8 million bond issue.

"It is all about expectations," Knudtson said. "It is first and foremost about stopping the bleeding. We have had two big ribbon cuttings and all the pomp and circumstances for a viable entity to take a place at the airport that turned out to be significantly short of what the expectations were. With that in mind and under the circumstances, it is all about trying to cut our losses and hopefully be a part of negotiating a deal that reflects a vibrant and ongoing entity at that building, which is now pretty quiet."

Multiple companies

The ribbon cuttings were for Commander and the company that originally induced the city to finance the building, Renaissance Air. The city council in 2001 agreed to issue the bonds, but Renaissance faltered when it was unable to pay its bills and the business was embroiled in legal battles.

The first attempt to land a manufacturing company at the airport took place in 1999. A company called Zenair, based in Toronto, Canada, chose Cape Girardeau to make two-seat, single engine aircraft. The city council authorized a $2.8 million bond issue and secured grant funding for water service upgrades. Zenair pulled out of the deal before the bonds were issued.

Paying the bonds issued in 2001 has been financially draining for the city. On July 1, 2004, the city's unobligated reserves stood at $1.4 million. That fund dwindled to less than $100,000 by July 1 as the city made $989,976 in bond payments while receiving only $94,000 from Premier. The council has also dipped into the reserves to cover regular operating expenses, especially in the last year as tax receipts failed to meet expectations.

Potential buyer

The potential buyer, who Knudtson did not identify, visited Cape Girardeau on July 1 and 2, meeting with Knudtson, Ward 3 Councilwoman Debra Tracy and Ward 6 Councilwoman Marcia Ritter. "He certainly has a vision and he has been working on it for several years," Ritter sad.

The meeting was encouraging, Ritter said, but she's withholding judgment until the deal becomes reality.

"I have always tried to be cautious," she said.

Putting Cape Girardeau's finances on the line for economic development has proved to be a questionable decision, Knudtson said. More recent deals have relied on the extra tax revenue the project generates to pay the costs, he noted.

The clock is ticking on the latest deal, he said. "There is a built-in deadline. This situation will be resolved by the end of August one way or another."

rkeller@semissourian.com

388-3642

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Pertinent Address:

Cape Girardeau Regional Airport, Cape Girardeau, Mo.